Cement sales, exports down in August over July

LAHORE: Cement sales and exports rose 5 percent year-on-year to 3.52 million tons in August, but the figure is much below 4.84 million tons recorded in July, industry data showed.

Cement sales and exports increased from 3.351 million tons in August 2019, according to All Pakistan Cement Manufacturers Association (APCMA).

In August, local uptake of cement increased 4.8 percent to 2.79 million tons. That was compared with 2.66 million tons in August 2019, while exports rose 5.8 percent to 0.72 million tons. That was compared with 0.685 million tons in the same month last year.

The spokesman of APCMA said the jump in cement sales in July looked like a one-off phenomenon.

“The industry was expecting that the momentum witnessed in July would continue but a decline in domestic uptake and exports was disappointing,” he said. The decline was mainly due to heavy rains, Eidul Azha and Moharram holidays.

The north-based mills dispatched 2.49 million tons of cement in the domestic market as compared to 2.347 million tons in August 2019, registering an increase of 6.3 percent. Exports from north were 0.211 million tons, 8.5 percent higher than the exports of 0.195 million tons in the same month last year.

The south-based mills continued declining trends in the domestic market as they dispatched only 0.301 million tons in August, 5.6 percent less compared to 0.319 million tons in August 2019. Exports from south increased to 0.515 million tons in August from 0.491 million tons in last year’s August, depicting an increase of 4.8 percent only.

The industry official said the industry is unable to understand why the impact of the construction package announced by the government to encourage the sector has not been felt in the south. Moreover, the normal growth of 6.3 percent in domestic sales in the north suggested that the impact of the construction package was not visible in August. The government should reduce duties and taxes on cement sector to increase cement consumption.

Overall dispatches during the first two months of the current fiscal year increased 21.8 percent to 8.35 million tons in August. That was compared with 6.86 million tons in August last year. Domestic dispatches stood at 6.74 million tons in July-August, an increase of 19.5 percent from 5.64 million tons during the same period last year. Exports during the period under review increased 32.2 percent to 1.611 million tons from 1.218 million tons in July-August 2019.

The industry official said cement sector and captive power plant should be given subsidised power and gas that is available to five exporting sectors. “Cement is an energy intensive sector and availability of energy and power at concessional rates would boost the cement exports appreciably.”